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Generational Theft: Lack of Social Security Reform in 2016

Social Security funds are set to dry up by the year 2034. In an election cycle with a focus on foreign affairs, national security, and the economy and jobs, Social Security reform has largely remained off the radar. As a millennial paying into this program fully knowing I will never receive its benefits if the system continues its course, I decided to dig a little deeper into the candidates’ positions on this topic.

Hillary Clinton

According to Hillary Clinton’s campaign website, Social Security “has been America at its best” for 80 years. Mrs. Clinton plans to not only expand Social Security, but also fight any effort to privatize it. She proposes tax increases for highest-income Americans – exceeding the current Social Security cap – and taxing areas of their income that are not currently accessed by the system. In order to fight the poverty rate of widowed women over the age of 65, Mrs. Clinton would like to reduce the benefit cuts that occur when a spouse dies.

Ted Cruz

Ted Cruz is in support of what he considers to be “commonsense reforms.” Senator Cruz believes this to mean implementing a gradual increase in the retirement age and allowing younger workers to keep a portion of their tax payments in a personal savings account as a move towards privatization of the program. He proposes an annual tax-deferral of up to $25,000 in Universal Savings Accounts. In a Cruz administration, benefit increases would never exceed the rate of inflation. He has received a lifetime rating of 13% by the Alliance of Retired Americans.

Bernie Sanders

Bernie Sanders touts Social Security as “the most successful government program in our nation’s history.” Senator Sanders proposes strengthening the existing system and expanding benefits. He seeks to increase benefits by $65 a month and secure Social Security for the next 50 years through his legislation that would lift the cap on high incomes – currently set at those earning over $250,000 annually –to provide more funding for the program, though this purported fix only briefly extends the solvency of the trust fund. The Alliance of Retired Americans has given Mr. Sanders a 100% lifetime rating.

Donald Trump

Donald Trump has previously acknowledged that if Social Security is here to stay, we must “reform it, make it more efficient, and ensure the program is solvent.” He has yet to lay out his exact plans on protecting this social welfare program, but has said it is unfair to those who have paid into it to make cuts to their benefits. Trump looks to strengthen the United States’ economy as the means to this end. His approach appears to be increasing jobs to increase tax revenue in order to cover costs of Social Security.

These various perspectives on fixing a failing system matter. Young voters must not overlook the urgent need for Social Security reform and learn which candidates are putting our future prosperity and opportunity at risk by failing to offer substantive ideas that promote economic growth while addressing severe shortcomings of the program.

Opponents of the Tax Cuts and Jobs Act, which delivered much-needed tax relief to the middle class and business owners large and small, have complained that the law is contributing to the increase in expected budget deficits over the next ten years. Certainly, budget deficits are a serious concern, and Congress has shown no interest in addressing the problem.

Fiscal conservatives rightly opposed the Bipartisan Budget Act, H.R. 1892, because it blew through the spending caps by nearly $300 billion over two years and set the tone for more long-term spending by increasing the baseline at which Congress will budget. Still, this two-year budget deal only covers discretionary spending for FY 2018 and FY 2019 and doesn't touch mandatory spending, which includes programs like Medicare and Social Security whose funding runs on autopilot.

Congress created the Supplemental Nutrition Assistance Program (SNAP) to reduce food insecurity among impoverished Americans. At the same time, Congress recognized that welfare programs must foster self-sufficiency. The Trump administration is looking for innovative solutions that improve both goals.

There are no longer any convenient ways of avoiding the issue. Social Security is going bankrupt. In order to ensure that it doesn’t take the rest of the country down with the ship, Congress is going to have to grit its teeth, swallow hard, and grab a firm hold of the proverbial third rail of American politics. It is time.

Last week, the White House unveiled its budget proposal for FY 2018. The proposal has been received coldly by most in Congress, including many Republicans. The budget isn't perfect, but it does begin to bend federal spending slightly downward over the next ten years, creating a $16 billion surplus in FY 2027. The biggest criticism from policy wonks is that the budget relies on 3 percent economic growth, in part, to balance the budget. The increased economic activity would increase revenue to the federal government.

Near the end of the 114th Congress, Rep. Sam Johnson (R-Texas) introduced legislation that would begin to address the severe fiscal problems that face Social Security. The most recent annual report from the Board of Trustees for the Social Security and Medicare Trust Funds explained that the two entitlement programs will not be able to pay full benefits to beneficiaries in the coming years.

So-called "progressives" are absolutely losing their collective minds about proposed spending cuts that the incoming Trump administration is planning. The Hill reported Thursday that the administration, which will take power today at noon, has a blueprint that calls for $10.5 trillion in spending reductions over the next ten years.

The Congressional Budget Office (CBO) released a report last month projecting an increase in the federal budget deficit relative to the gross domestic product (GDP) for the first time since 2009. The deficit for this year is now expected to be $590 billion. As a percentage of GDP, that is 3.2% compared to last year’s 2.5%. It is not good news when the deficit is growing faster than the economy, which is currently growing at 1.4%.